Is Monster Still Scary?

Monster's had some problems this year, but should you buy the stock?

Monster Worldwide (NASDAQ:MNST) can help you land a job when you need one -- but should your portfolio employ the company's stock? Let's see what the latest batch of data says.

For the third quarter, Monster delivered the goods on the top line with a nice double-digit revenue gain of 18% for sales of $337 million. Net income clocked in at $0.25 per diluted share, or $0.35 after adjusting for restructuring and other charges.

Free cash flow dropped 6% year over year, but since Monster's operations aren't capital intensive, it was still able to generate $62 million in FCF. Not to mention that Monster has a pretty solid balance sheet -- cash and cash equivalents of $117 million significantly outweigh the company's debt of less than $2 million.

But it wasn't all good news. Income from continuing operations declined 16% as Monster's operating expenses -- which jumped 27% -- outpaced sales growth.

The gold star in Monster's earnings report came from the international side of things, where revenues rose 57%. That trend will continue as international revenues become a bigger part of Monster's revenue pie. As CEO Sal Iannuzzi reiterated: "We believe our opportunity in the international markets is just beginning. We are in, really, the early stages of developing those markets."

Monster has had an interesting year, to say the least. Back in April of this year, the company changed CEOs amid options problems and issues of operating growth. Then, less than two months later, Monster's CFO was also replaced. There are a lot of moving pieces here, but the new management has outlined a restructuring plan to drive down expenses and improve margins.

Monster, which competes with companies such as Yahoo! (NASDAQ:YHOO), Kforce (NASDAQ:KFRC), and Manpower (NYSE:MAN), might not be wowing shareholders right now with its decline in continuing operations, but let's be fair -- it's trying to turn itself around, as Ryan Fuhrmann noted recently. The company also has a good amount of brand equity tied up in its monster.com domain.

As long as Monster can keep its executive lineup stable and stay away from any further exploration of the awful world of options scandals, I think the company will do well over time, especially once the restructuring relief kicks in. If all goes well, it might be time to take a serious look at Monster.